OVERVIEW GLOBAL TOMATO MARKET

The tomato market is quite stable in Europe, although there have also been some developments worth mentioning. The announcement that two large Dutch growing companies are planning to join forces is big news in the Netherlands. Neighbouring Belgium is seeing a drop in the demand from Southern European countries. In southern Europe, local growers are feeling the pressure of the competition from Northern European imports. The only way to make money is by growing specialties. The market for those tomatoes is growing at a huge rate. Producers in Ukraine are also aware of this trend. In the United States, various producing areas are on the market at the same time, so there is a large supply. For the time being, there is no surplus. In neighbouring Mexico and Canada, the shortage of labour is the bottleneck.

Upscaling in the Netherlands

In the Dutch tomato market, there is currently a sufficient supply and a reasonable demand. According to traders, the prices are not impressively high and the market is good, but slow. It is difficult to make higher prices ahead of the summer holidays. With higher prices, certain markets are affected due to competition from local produce or Polish tomatoes. For organic on the vine tomatoes, sales are not that great this season, because the largest sales market, Germany, is becoming more self-sufficient. In the Dutch tomato sector, the announced merger between RedStar and Looye Kwekers is the news of the week. The two companies have been focusing on tasty tomatoes for a long time and have a combined turnover of 180 million Euro. The message mentions the upscaling in terms of both supply and the number of customers as the most important reason.

Over the past few decades, Dutch horticulture has undergone massive upscaling. In the past twenty years, the average size of a tomato company has grown from 1.8 hectares in 2000 to more than 7 hectares in 2018, as revealed by the most recent CBS figures.

RedStar and Looye have not been the first to decide to start working together. In 2016, tomato giants Agro Care and Kesgro also joined forces. They have since formed a company with more than 150 hectares.

This year, growers De Kabel and Schenkeveld also announced their merger. From 1 January 2019, they will form a business with 58 hectares. De Kabel and Schenkeveld are both members of Prominent. The growers' association announced earlier this year that it would be scaling up, because the current average size of 10 hectares is not enough to remain competitive in the retail segment. They see three options for their members: growers expanding on their own, merging with fellow growers or choosing to bring their companies into the association. After the announcement, the growers association Mondial Group (29 hectares) decided to join Prominent. This brings the total acreage to 418 hectares.

Belgium: Lower demand from southern Europe

Belgian traders report that the demand from southern European countries is low at the moment. The reason for this is the bad weather and the competition from local productions. In Portugal and Italy, for example, the demand is held back by the disappointing weather. However, a trader expects the demand to pick up again in the coming weeks. Southern European countries are a good market for Belgian exporters, especially for the Coeur de Boeuf and San Marzano tomatoes, but also for specialties and on the vine tomatoes. Greenhouse producers have mostly escaped the impact of the drought. The greenhouses have sufficient water reserves to get through dry periods. Due to the warm weather, the vegetables ripen faster.

German market unstable

In Germany, the tomato market is currently recording strong fluctuations. Up to a week ago, the price was relatively low due to a huge oversupply. In recent days, however, prices have been gradually recovering. The demand is also relatively high at the moment, as a result of which, the trade has been stabilising somewhat, as confirmed by various traders. On the German wholesale markets, the Dutch and Belgian on the vine tomatoes are particularly popular. These share the shelves with domestically-grown varieties. Besides, there are also tomatoes from Poland and France here and there, and Italy and Spain also have a good share of the market when it comes to small Cherry tomatoes.

The most striking market trend is the steady price increase of Dutch and Belgian on-the-vine tomatoes. On some wholesale markets, prices have jumped by up to 70 percent last week. The price of Dutch and Belgian beef tomatoes has also clearly increased, by up to 25 percent in some places. Also, the so-called mix packages are becoming very popular on the German wholesalers confirm that the market share of this product segment keeps growing.

French consumers prefer specialties

In 2017, June was the busiest month for French tomatoes, and this year it has again been a busy time for the growers. A producer tells us that their first tomatoes were harvested in mid-June. He supplies open ground tomatoes in limited volumes. The season lasts until September.

Last year was certainly not a fantastic year for tomatoes. Prices stood barely above average and melons became strong competitors on the market. However, things have been going well for a long time for varieties such as the Zebra and the Pineapple, and many growers have included these varieties in their assortment. According to the figures announced by FranceAgriMer, the normal, round varieties are becoming increasingly less popular, as many consumers have been switching to specialties.

Italy: Good summer tomato season

The Italian summer tomato season is now in full swing after the end of the winter season in Sicily. The balance of the latest campaign is positive, despite some peaks and lows. The growers who focus on quality products and not on bulk have achieved satisfactory results.

Tomato prices are good this summer, but the best quality is intended for export. In fact, in the supermarkets, Dutch tomatoes dominate over the domestic. Yet there are also traders who report disappointing prices. At the end of June, traders reported that the prices had been low for two weeks. This market situation is not uncommon in June, when several regions in the country are on the market at the same time. Moreover, imports from the Netherlands and Belgium put the market under pressure.

By segments, the market for Cherry tomatoes seems stable, while that for Plum tomatoes seems to be gaining ground, as they are becoming available at more and more stores. The San Marzano seems to have reached its peak when it comes to visibility; the prospect is that this tomato will lose popularity in the coming years. In the beef tomato category, the Coeur de Boeuf is becoming a popular variety, together with the classic ribbed tomato. Within this category, several new varieties are being promoted, including a pink tomato.

In Sicily, growers are already looking forward to the 2018/2019 season. That campaign will mainly be dominated by Cherry, mini Plum and Plum tomatoes. Sicilian growers are unable to compete with the Dutch, Belgian and Australian tomatoes. Growers in those countries have a higher yield per hectare for the larger varieties than in Sicily. That is why the focus is on the specialties. Also, plum tomatoes have a promising future; in recent years, they have grown by more than 20% per year.

Spain relying on imports

There is hardly any local production available at this time. This supply consists mainly of green tomatoes from Malaga, Murcia and other varieties from Valencia. That is why Spain is currently relying on imports of on the vine and beef tomatoes from the Netherlands and Belgium. Loose tomatoes are imported from Poland and small volumes from France. The French tomatoes are more expensive because the quality is higher and there is a good demand for these tomatoes in the French market. A large retailer is importing all tomatoes from Portugal.

The season kicks off in Almeria in autumn. The growers start planting in the first week of August. The previous season was good for tomato growers in Almeria, especially for the growers of specialties. The market for on the vine tomatoes, however, was very bad. There are more than 30,000 hectares of greenhouses in Almeria and it is still unclear how the tomato acreage will develop this year. What is certain is that the one devoted to sweet peppers continues to expand and that this is happening at the expense of other crops, such as courgettes, aubergines and tomatoes.

Ukrainian growers invest in greenhouse cultivation

More and more tomatoes are grown in greenhouses with modern techniques. Large seed suppliers have become aware of the growing opportunities in the Eastern European country and are trying to capitalise on them. They are doing this, for example, by opening a demo greenhouse where growers can see the varieties and gain more knowledge about tomato cultivation. A seed supplier says that the construction of each greenhouse hectare requires an investment of one million dollars. "This is a testament to the stability in this region. The acreage for winter production has increased by almost 130 hectares." This rising trend does not only apply to tomatoes, as cucumber cultivation is also on the rise.

The growers increasingly choose specialties such as Cocktail, Cherry, Yellow, Pink, on the vine or Black tomatoes, because they are more profitable. On 2 June, Cocktail tomatoes yielded 2.27 Euro per kilo on the domestic market, while the medium-sized and beef tomatoes cost between 0.75 and 0.81 Euro per kilo. Many open ground growers in western Ukraine are choosing to grow in tunnels.

US: All regions at the same time on the market

Tomatoes are harvested in many different regions, so there is a large supply. "We are in July, and in this month, there are a lot of tomatoes available across the country," says a trader. Besides the local harvest, there is also supply from Mexico and Canada.

The warm weather has been good for the production in areas such as North Carolina, Tennessee and California. In the latter state alone, there are many different regions where tomatoes are being harvested, so the supply is quite large. Tomatoes are also currently being harvested in Arkansas, Tennessee and North Carolina. "It is very hot and dry and it seems that the tomatoes from all producing areas are hitting the market at the same time." In the next two weeks, the harvest will also start in New Jersey and Michigan.

Due to the good weather, the production is expected to be larger than last year's. The demand remains similar, although it is likely to increase in the course of July. Summer parties and barbecues are good for the demand for tomatoes. Prices are stable, but below the level that growers would like to get. Compared to last year, the tomatoes yielded 10% less due to the large supply.

Mexico and Canada: Labour shortage is the greatest bottleneck

As far as the North American market is concerned, labour is still a big problem. While Mexican growers face competition from, among others, the car industry, Canadian vegetable growers have to compete against cannabis growers to attract labourers. Since cannabis producers currently expect high yields, they are able to offer higher salaries, so vegetable cultivation is affected. The total amount of available labour is limited.

Australia grows mainly for its own market

Tomatoes are grown year-round, although the peak in the harvest is reached in the winter months. In the 2016/2017 campaign, 426,398 tonnes of tomatoes were harvested, which was 18% less than a year earlier. These figures were released by Hort Innovation. Although the volume decreased, the value grew by 19% to $ 645 million. Approximately 530 tonnes were exported. Singapore is the main customer, accounting for 26%, closely followed by New Zealand, with a share of 24%. Imports fell by 33%, down to 932 tonnes.

Field Tomatoes have the largest share of the production (42%), followed by the Large Truss (33%), Cherry and Grape (22%). Roma tomatoes (including mini-Roma) have a share of 3% of the total. Out of the total production, 184,682 tonnes were supplied to the processing industry.

In New Zealand, consumption and cultivation are growing as a result of the rising popularity of specialties. This includes, for example, on the vine tomatoes, both standard and small sizes, as well as Plum and Cherry tomatoes.